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    Great Powers: America and the World After Bush
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    by Thomas P.M. Barnett, Vonne M. Meussling-Barnett
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    by Thomas P.M. Barnett, Vonne M. Meussling-Barnett
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    The Emily Updates (Vol. 5): One Year in the Life of the Girl Who Lived (The Emily Updates (Vols. 1-5))
    by Vonne M. Meussling-Barnett, Thomas P.M. Barnett, Emily V. Barnett
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Fracking confronts the reality of limited water resources

WSJ piece noting that all this hydralic fracturing (fracking) is coming up against local water limits.  Already, US fracking uses water on par with the city of Chicago or Houston.

So the industry jumps into figuring out how to reuse the water multiple times by cleaning it up (not enough for drinking but enough to reuse).  Already in PA the percentage use of recycled water is up to 17% this year, jumping from 13% last year.

This is a huge issue, because we're looking at 1 million more fracking wells globally by 2035, according to Schlumberger (oilfield services co.).  The issue is expressed both in unwanted externalities (enviro risks/damage) and cost within the industry (acquiring and disposing).

Something to keep an eye on, as the industry competes with Mother Nature (climate change), agriculture and urbanization globally.


The micro-corollary of sovereign land sales: wooing foreigners to unsold properties

Again just back to a pet notion of mine:  all this debt + demographic aging in the West is going to lead to some countries selling off or making available for sale things that otherwise would not be considered to outsiders they would also not otherwise tolerate.

Point came up in recent Wikistrat sim on the Arctic:  Can you imagine China buying its way onto the Arctic Council by so bankrolling/purchasing/whatever a member state (bankrupt Iceland, independence-minded Greenland, etc.) that it effectively captures its seat.  I know, it sounds impossible, but then you remember how America got its seat (Alaska).  But then you say, those were different times when bankrupt states or overstretched regimes would sell off that which they could no longer manage/exploit/defend (like Russia on Alaska).

But then I wonder:  why can't we collectively head back into that territory with all this debt and demographic aging in the West.  Is this not the elderly couple downsizing their house - just writ large?

So you look at Spain right now, and the NYT headline reads, "Spain woos foreigners to thin its investory of unsold homes."

Now, Spain has always been sort of interesting on immigration - as in, innovative.  They wooed foreign workers in the good times, and then subsidized their return home in the bad times.  So now they're being aggressively innovative in the bankrupt times.

But it gets you thinking, huh?


Great summarizing FT article on "global food security" risk

Notice the equatorially-centric band? Remind you of another map?

Starts by calling farmers "the canaries in the mine when it comes to climate change."  Brilliant.

What affects farmers affects the global food supply and causes the price rises that hit middle class wallets and increases the risk of hunger for the world's poor.

CC isn't the "only culprit" when it comes to good security.

The primary drivers, the article notes, are population growth and the stunning growth of the global middle class, which, as we know, likes to eat and eat well.

Next is the loss of land to food crops due to urbanization and the diversion of crops to fuels (dumbest idea in human history).

But here's the quote that caught my eye:

If these were the only pressures on the global food supply, feeding the world sustainably could still be achievable, says Jerry Nelson, a senior research fellow at the International Food Policy Research Institute (IFPRI).  "If you didn't have climate change, you could tell a story about how it will be challenging and how we need to invest more in productivity, reduce waste and manage international trade," he says.  "But this would be something we could accomplish.

"When you throw climate change into the mix, that makes everything a lot more difficult."

Or better said - with regard to risk - more uncertain.

Great little piece in "FT Special Report: Managing Climate Change."


The Chinese Communist Party comes up with new "test" for industrial projects

Thanks to growing grass-roots protests by Chinese citizens over big industrial projects, the NYT reports that the government there now says all such plans must pass a "social risk assessment" prior to final approval.  

Interesting choice of terms, yes?  The environmental impact is what the people worry about, but it's the "social risk" that gets the government interested.  Apparently this has been done in some local governments for a while now (the experiment, per the Chinese way) and now it's being adopted on national scale.

China already has environmental impact studies, and now the government says (as of 1 Sept) that they must be posted on the internet (also interesting).

Environmental minister says, "By doing so, I hope we can reduce the number of mass incidents in the future."

The tipping point?

Enviro protests used to attract only the old and retired.  Then the young started showing up in numbers, and that's when the Party got scared.

China is, as I argue, on the verge of a huge and prolonged progressive era.  All sorts of things to clean up. Each time such steps are taken, just a bit more power to the people - always defensively offered by the government.


Lesson in eBook marketing

When I published the five-volumes of The Emily Updates about a year ago, I made them $2.99 each.  Not smart.

They sold at a slow clip and, at one point, they all got in the middle of the top 100 for Caregiving within Physician and Patient within Medicine within NonFiction.  They never scored in the 100 within Medical within Professionals & Academics within Biographies and Memoirs within NonFiction.

So my brother Andrew, he the librarian and self-publisher of several eBooks (but also an upcoming version of General George Barnett's memoirs for the Naval Institute Press), finally advises me to cut the price down to 99 cents for vols 2-5 and make vol. 1 free (to do this on Amazon you need to sell it for free somewhere else so they price match and I did this on SmashWords).

Suddenly we're seeing a lot move movement and our first review!

Which I have to say, is the perfect review for the endeavor.

The proof:


  • Vol I is now the #1 free book in Caregiving (out of only 2, so let's say the competition is limited), but III is now #2 on the paying list, II is #3, V is #9 and IV is #10.
  • Going up a level to Physician and Patient (all first time hits), vol. I is #10 (of 11 on Free), but III is #14 on paying, II is #15, V is #44 and IV is #46.
  • Going up to Medicine (nose bleed territory for us), vol. I is 44th on the Free Top 100.


Alternately, the volumes appear for the first time in the Biographies and Memoirs track:


  • Vol I is #2 in Medical Top 100 Free, III is #44 on the paying list, II is #45, V is #82 and IV is #85.
  • Going up to Professionals and Academics, vol. I  is #10 on the Free Top 100.
  • Going up to Biographies & Memoirs, vol. I is #73 on the Free Top 100.


Admittedly, a "hill of beans," but fun stuff to the three of us: my spouse Vonne, daughter Em (now studying in Japan), and me.


Big surprise: Asia wants a regional trade bloc that includes China

The Obama Administration's big idea was a Trans Pacific Partnership that magically excluded China.  It is the lynchpin, along with the "strategic pivot" of US military forces into East Asia, of his dreamt-of 21st century containment of China's rise.

The "pivot" idea is merely stupid, but the TPP was magnificently dumb.

We encouraged China's rise (after encouraging the tigers and before that South Korea and Japan) by playing regional military Leviathan and enabling their export driven growth by keeping our markets open.  The implicit deal:  take that trade surplus (now consolidated by assembler-of-last-resort China) and plow it back into US debt markets, keeping our dollar cheap and enabling more of the same (we import goods, we export security, everybody peacefully rises, and the world is a better place).

That transaction strategy, as I have called it, worked wonderfully for years and years.  But it came to its logical endpoint in the crash of 2008.  We simply can't sustain such a grand strategy any more and, frankly, we don't need to.  Asia is risen, it remains peaceful, and its logical regional integration now proceeds.

Can we still play Leviathan in this process?  At great cost, yes, but a Leviathan is not what is needed now. It is now longer a possible achievement, given China's rise, and attempting to maintain that status now only gets you unnecessary tensions and arms racing.  

Instead, the economic integration needs to be matched by suitable regional security arrangements.  Those arrangements tend to come via crises or hotspots like the South China Sea issue.  You either fix them or they fix you.

The new grouping is seen as a rival to a trade initiative of the Obama administration, the 11-nation Trans-Pacific Partnership, which includes many of the same countries but excludes China.

The announcement came as China was facing pressure to back down from its hard-line stance in its disputes with four Southeast Asian countries over ownership of islands in the South China Sea.

What ASEAN's proposed Regional Comprehensive Economic Partnership says is that, no matter the lingering tension on the islets issue, Asia's economic and trade and investment integration will proceed.  And no, it won't be held hostage to Obama's containment fantasies.

Some analysts in Asia describe the Obama administration’s trade initiative as one element in a policy to contain China, the world’s largest producer and exporter of manufactured goods.

“China’s exclusion is strange, given its huge economic presence in the Asia-Pacific” region, Amitendu Palit, a visiting senior research fellow at the Institute of South Asian Studies at the National University of Singapore, wrote in a recent edition of East Asia Forum. “This has given rise to views that the United States is driving the Trans-Pacific Partnership with the strategic objective of marginalizing China.”

There are plenty of Chinese behaviors that we need to work, but we're no longer in charge of how things unfold in Asia, and no amount of military hardware parked there is going to change that.


Africa: investments and insurgents

Pair of WSJ stories:  first one on Carlyle Group joining the list of private equity firms rushing in with yet another Sub-Saharan Fund; and second on EU debating whether to fund a cohort of West African states looking to combat the radical Islamic militias that have taken over northern Mali with the intention of setting up their own separate state.

The combination is - to me - telling of that dynamic of rapid frontier integration that I'm always going on about.

Africa is, of course, not really a frontier in a settling sense, but it is one in a globalization-investment-trade sense.  And when you're a frontier in that sense, it's not surprising to see both dynamics in play, as the "rush" of connectivity creates its own blowback (the central theme of my books).

From the first piece:

The investments, and Carlyle's nascent Sub-Saharan Fund, targeted at $500 million, show how private-equity firms are trying to position themselves to tap into the continent's new consumers as well as companies that are expanding on the back of demand for food and energy from the rest of the world.  Competition among global rivals is heating up in Africa, as investment returns diminish in more developed parts of the world.

From the second piece:

West Africa countries are trying to set up the force to help Mali to regain control of its northern half, which is under the sway of the al Qaeda affiliate, known as al Qaeda in the Islamic Maghreb, or AQIM.  The nations say northern Malie is becoming a haven for violent groups that live off kidnapping and trafficking as well as a training ground for terrorists who could destabilize the whole region.

I mean, seriously, I bet I could find you similar stories in U.S. East Coast newspapers from 1870-something that describe new funds and new military efforts being launched for the American West.

The speed of both dynamics is, in terms relative to even our recent past, rather stunning.  The worst thing I wrote in The Pentagon's New Map concerned my pessimism over Africa's future.  I just had the whole thing taking far longer than it is.

And that's a real lesson for me.


You know that recurring dream about going back to high school?

Spending school day lecturing to three AP Government classes at Son #1's H.S.

Pretty fun, actually.

Ate lunch with the teachers in their lounge.

Great school. Made my senior son happy.




Obesity epidemic: one variant of the punitive approach

WSJ headline says Denmark scraps it's "much-maligned 'fat tax' after a year."

Danish lawmakers have killed a controversial "fat tax" one year after its implementation, after finding its negative effect on the economy and the strain it has put on small businesses far outweigh the health benefits.

Nations including Switzerland, the U.K, and Germany have held up the tax, which applies to any food containing more than 2.3% saturated fat, as a potential model for addressing obesity and other health concerns. But in Denmark, it has been a source of pain for consumers, food producers and retailers as the nation's economy struggles.

"The fat tax is one of the most maligned we [have] had in a long time," Mette Gjerskov, the minister for food, agriculture and fisheries, said during a news conference Saturday announcing the decision to dump the tax. "Now we have to try improving the public health by other means."

The failure of Denmark's fat tax is a demonstration of how difficult it can be to modify behavior by slapping additional duties on products seen by many as essential staples, especially during tough economic times. Products such as butter, oil, sausage, cheese and cream were subject to increases of as much as 9% immediately after the new tax was enacted.

"What made consumers upset was probably that an extra tax was put on a natural ingredient," said Sinne Smed, a professor at the Institute of Food and Resource Economics.

The fat tax comes to an end after netting an estimated €170 million ($216 million) in 2012 in new revenue. Danish lawmakers will slightly raise income taxes and reduce personal tax deductions to offset the lost revenue. The lawmakers also decided on Saturday to reverse an earlier decision to create a sugar tax.

"This is not what is needed in the current economic situation," said Holger Nielsen, Denmark's minister for taxation.

Human bodies are designed to crave fat, especially when we're stressed.  The body is telling us to store up because things seem dangerous.  This is evolution talking:  if things are going south, better to stockpile fat now for the bad days ahead.

Problem is, modern life creates all sorts of stresses and modern food companies love moving this sort of product, because it nets them the highest profits.

End result:  an obesity epidemic.  The food companies know how to trigger our interest, and life provides all manner of stimuli that triggers our desire.  The cost is pushed downstream.  

Governments want cheap food but then regret the healthcare bill that follows.  Governments then try to go punitive - actually on the consumer - by issuing a fat tax that the sellers pass on directly.  Consumers get mad, tax gets scrapped.

Conservatives yell, "nanny state."  But in truth, Western governments already lavish the ag and food industries with subsidies that encourage all this, meaning the nanny state is already here, she's just encouraging us to eat the worst sorts of food (or the most profitable to sellers).  In relative terms, veggies and fruits aren't subsidized, grains are.  So we're being fatted up by our nanny state for the healthcare providers.

Governments can't disincentivize bad eating by taxing people.  They need to rejigger the already bad incentive system for ag and food companies.

Still, the fact that states are trying is an indicator of the progressive agenda that eventually must come.

But Big Food wins another round ("See, the evil government is trying to deny you your bad diet!"  Cha-ching!)


Funniest SNL video ever (for me, at least)

Painfully true, like I wrote this!


Fun with Son #2


Saudi America

Title of the WSJ's lead editorial on Tuesday.

Two charts displaying the tectonic shift afforded by fracking technology.

This, plus fiscal constraints, makes for a new definition of US superpower-dom.

Let the debate begin ...


Greece: how bad does it get?

Malaria still existed throughout much of the US in the 1930s/40s.  Since then it has gotten much warmer throughout the US.  But malaria is basically gone now.  Why?  Rising incomes.

So the point on global warming is, it'll create real problems wherever states and societies don't have the money to deal with the challenges - such as insect migration.

Now take a look at this chart from the WSJ and realize what happens when incomes fall - and how quickly.

Recently, Wikistrat ran a sim where we discussed the possibility of states making sovereign land sales.  Several analysts said that, while that happened in previous centuries (note how most of America was acquired), nobody would consider that now.

My comeback was, if the financial situation gets bad enough, countries will sell just like people get rid of an underwater house.

Greece is looking pretty bad, and I think it's a harbinger of massive debt issues to come for a demographically aging West.

The discussion we had was about the Arctic and the possibility of some Arctic Council members selling out to non-members so as to tap the finance needed for exploitation of opportunities.  After all, the US bought its seat at the table - aka, Alaska.


South China Sea energy: just how valuable/feasible?

FT story on new Chinese estimate for natural gas ("far greater reserves . . . than previously thought") in South China Sea (roughly 500T cubic feet).  Also 17B tonnes of oil.

Yes, those are both weird British measures.

But the accompanying reality:

Although only a fraction of those resources would be economically feasible to extract, analysts calculate that the levels of reserves could one day double China's current proven reserves in oil and gas.

Hmm.  A doubling of reserves, but the new stuff is largely not worth extracting.  I'll leave the glass-half-full/empty calculation to others.

Piece also quotes Hu Jintao on way out of power declaring that next generation of leaders must make China a "maritime power."


But Wang Yilin, boss of CNOOC, while noting that Hu's words "showed the way," also said "the company wanted to 'lay aside disputes and develop [the South China Sea reserves] jointly' with international companies."

So there you have it:  China is declared to be way behind as a maritime power, so it must build up those assets. Big reason is South China Sea and all those energy reserves, even if only a fraction will ever be pulled and that difficult feat requires lots of joint ventures with foreign energy firms.

Sounds like WWIII to me.  Thank God for the AirSea Battle Concept, because we all know that sea control = seabed control (sort of).  I foresee vast drone forces duking it out over a no-man's water.  It'll cost several fortunes, but all those unfeasibly-accessed energy reserves will pay for it.

You have your orders.


Tom Searcy's and Henry DeVries' "How to Close a Deal Like Warren Buffett"

Shameless book plug here.   I've known Tom Searcy for a while (see his interview of me here) and he's written a really cool book with Henry J. DeVries entitled, How to Close a Deal Like Warren Buffett: Lessons from the World's Greatest Dealmaker.  I did an early review a while back and offered a blurb which appears in the front material and on the back cover.  In full it reads:

Searcy and DeVries have made their own science of dissecting how persuasion leads to decisions leads to big deals.  This book is Dale Carnegie reconfigured for the business world.

--Thomas Barnett, contributing editor of Esquire and author
of Great Powers: America and the World After Bush

The book's promo page is found here.

The book basically parses out Buffett's many maxims on how to conduct one's business life, with the proximate focus being which deals to pursue and close. But like any good book, this one actually speaks about a whole lot more than the subject material at hand. In sum, it has an almost spiritual feel, as it's as much a guide to a life well led as a deal well structured.

I do highly recommend it.


No-fault separatism thanks to globalization

Old argument of mine:  globalization comes in and all manner of divorces ensue.  Typically it's a fake state in the Gap that's coming apart at the artificial seams, but the larger point is, the more overarching multinationalism you have, the lower the cost of divorce/remapping.  You're going to be together anyway (you still have the "kids" of the union), but why stay together if you don't have to?

Europe demonstrates this:  the more integrated it becomes, the more states appear.

Great FT one-pager on "long-simmering separatist movements . . . gaining strength."  You might think it's the Eurozone troubles that is responsible, but that's the proximate opportunity - not the ultimate enabler.  Real federalism is coming, so why not get out of your unhappy marriage in the bargain?

Here's the counterintuitive part: it's often the most competent and richest that want out.  The better want to leave behind the worse.

So this isn't about suffering.  This is about ambition.


The RMB can't be a reserve currency yet - be can it still act a bit like one?


FT op-ed certainly has me thinking.

Reality of a reserve currency:  you need to be willing to leave large amounts of it lying beyond your shores. People need ready access to it.  You can't be in a serious capital importing mode (which tends to happen when you grow).

So, most experts say, China can internationalize the use of the RMB but it won't be  a real reserve currency because China won't allow large enough amounts to float around out there (Beijing wants tight control over value), plus, the country still needs to develop a vast impoverished interior of half-a-billion people, so it'll be in the capital-importing mode (trade surplus, investment) for a long time.

Makes sense.

But then Arvind Subramanian (smart guy on China) and Martin Kessler (I don't know) write this op-ed in the FT, pointing out that East Asia is "now a renminbi bloc because the currencies of seven out of the 10 countries in the region - including South Korea, Indonesia, Taiwan, Malaysia, Singapore and Thailand - track the renminbi more closely than the US dollar."

Same is becoming true for India, Chile, Israel, South Africa and Turkey.  That's some real influence, ja?

In their minds, these are the "gravitational forces of economics" that China naturally exerts over major trading partners.  No, China ain't big enough to do that to the dollar (would that it could so we might gain some discipline from somebody besides the more bankrupt EU), but already we see the emergence of a RMB East Asian monetary regime.

Again, nothing happens over night.  But ask yourself:  you think this is going to go away or get stronger over time?

If it's the latter, then we're looking at the future.

What this means for China, oddly enough:  as it is forced into certain reforms, now it ends up having to take into account not just what happens inside China but across the implicit RMB monetary regime that is East Asia.

But the upside:  "If China were to liberalise its financial and currency markets, the lure of the renminbi would broaden and quicken."

Old bit of mine:  more you want to connect, the more you are subject to all manner of rules - and they come in so many forms and sizes, but they all constrain.  Success is interdependent; failure is all your own.

Fascinating stuff.


China not-so-bad sign: no longer growth-at-all-costs

Nice NYT story on growth of (primarily) middle class resistance to unlimited growth ambitions WRT environmental damage.  Most experts who track the grass-root democracy arising in China have noted its strong concentration in the environmental realm.  

It's a natural development that we've seen everywhere else a middle class historically arises:  once you get to a certain level of GDP ($4-7,000) you start caring about the environment a whole lot more.

Chart shows all the places where projects have been delayed/cancelled in response to popular demands.

Point being:  all part of the natural slowdown in growth that comes with modernization.  Things get more complex.  The public puts up with less crap.  China is not different in this regard whatsoever.

As I've noted for years now, Asian countries that modernize and open up to globalization typically do so as single-party states (either explicit or de facto) for about 5 decades.  Then things change.

That logic says China goes democratic in the 2020s - or faster.


4-5 in presidential elections


Lost to Reagan twice and HW once.

Won twice with Clinton.

Lost twice with Bush.

Won twice with Obama.

Voted once in WI, twice in MA, once in MD, once in VA, twice in RI and twice now in IN.

What always gets me in the end?  Supreme Court Justice picks. You don't think about it much on election day, but man, do you ever when somebody announces a retirement (or death).  I just keep thinking about all those 5-4 decisions, like the recent one on the healthcare law (which I support).

Also this time: the sense that the GOP is losing its grip.  Way too obstructionist over Obama's first term.  Now polling lower than Independents, which stuns me.  Losing women, which is a long-term issue of significance. Losing Hispanics, another long-term issue.  The GOP is not a healthy lot, and their talent seems thinner than ever.  it is becoming the party of scared white people in a multinational union experiencing unprecedented demographic change.  That's not a winning proposition.

The Dems, meanwhile, have much better long-term prospects.  Thus some genuine system utility in hopefully seeing the GOP realize how far they've drifted.

Yes, there will be many within the GOP that says "we lost because we nominated a moderate."  But a hardliner would have done far worse, in my opinion - just driving up the Dem advantages on minorities and gender and sexual orientation (not a small percentage to ignore by any means).  Simply put, that tent needs to be expanded because the GOP is running third right now.

And no, I don't think the GOP should draw much satisfaction from the popular vote.  It's simply amazing that Obama won with the recovery coming so late.  Six months from now he'd win by a much bigger margin.

Why do I worry about the GOP?  In the end, they are more likely to be the agent of triggering a new progressive era (remember TR) than the Dems.  I can see the Dems joining in with relish.  I just suspect they won't have enough panic within their ranks to initiate.

So I'm hoping the GOP eventually locates that panic.

The clear pattern:  states with borders largely go Dem and inland states overwhelmingly go Republican.  It's just like China's emerging split and that of risers everywhere.  States that face out versus states that face in.  In the U.S., it's who's more open on immigration and less China-bashing versus who's tougher on immigration and more China-bashing.  The GOP simply doesn't work as the party of fear.


China bad sign #2: young professionals leaving in record numbers

Yes, a brain drain as reported in the NYT.

At 30, Chen Kuo had what many Chinese dream of: her own apartment and a well-paying job at a multinational corporation. But in mid-October, Ms. Chen boarded a midnight flight for Australia to begin a new life with no sure prospects.

Like hundreds of thousands of Chinese who leave each year, she was driven by an overriding sense that she could do better outside China. Despite China’s tremendous economic successes in recent years, she was lured by Australia’s healthier environment, robust social services and the freedom to start a family in a country that guarantees religious freedoms.

“It’s very stressful in China — sometimes I was working 128 hours a week for my auditing company,” Ms. Chen said in her Beijing apartment a few hours before leaving. “And it will be easier raising my children as Christians abroad. It is more free in Australia.”

As China’s Communist Party prepares a momentous leadership change in early November, it is losing skilled professionals like Ms. Chen in record numbers. In 2010, the last year for which complete statistics are available, 508,000 Chinese left for the 34 developed countries that make up the Organization for Economic Cooperation and Development. That is a 45 percent increase over 2000.

Guess who wins this lottery, as usual?

When experts note that China modernized and marketized and opened-up to the world for the past 40 years and the Party still rules, they miss the reality of what happens when a critical mass middle class appears and starts wanting more than just a rising income.

That day has arrived.

So no, it's not a question of "Can China ever go democratic?"  It's only a question of when.

There is nothing unique about Chinese or Asian civilization in this regard.  Modernization is modernization.  People are people.  Democracy isn't achieved because it's fabulous.  It happens because it's the best worst system you can manage when you reach the point of genuine development.